South African Gold Reef says buy-out deal fails

Gold Reef said in September last year a consortium known as Bidco, including South African private equity firm Ethos Private Equity and Goldman Sachs, would pay us$ 4.61 per share for the group.

But it said the deal had fallen through after it had failed to get the green light from various gambling boards by Friday, as required under a scheme of arrangement agreed with the consortium. The private equity consortium had chosen not to extend the deadline.

South Africa’s Securities Regulation Panel said on Friday that Gold Reef had contravened four rules around securities regulations, blocking the buy-out. Shares in Gold Reef were 3.26 percent higher at us$ 3.39 while the JSE Securities Exchange’s Mid-cap index was 0.44 percent firmer.

Gold Reef said on Monday it would await the panel’s reasons for the ruling before making further statements around the decision. "The Board of Gold Reef remains confident about the future prospects of Gold Reef," it added in a statement. "Cash flows remain strong and business fundamentals remain sound notwithstanding the current economic conditions."

Gold Reef operates the Gold Reef City theme park in Johannesburg and other casinos and hotels across South Africa. It expects to release its latest results on March 17.